E. Ganzon, Inc. v. Secretary of Justice

FIRST DIVISION

[G.R. No. 205072. July 6, 2021.]

E. GANZON, INC., petitioner, vs.THE SECRETARY OF JUSTICE, JERONIMO U. KILAYKO, ET AL., respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution datedJuly 6, 2021which reads as follows: HTcADC

"G.R. No. 205072 — (E. GANZON, INC., petitioner, v. THE SECRETARY OF JUSTICE, JERONIMO U. KILAYKO, ET AL., respondents). — This is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, as amended, assailing the Decision 2 dated September 25, 2012 and Resolution 3 dated December 13, 2012 of the Court of Appeals (CA) in CA-G.R. SP No. 104635. The assailed issuances affirmed the Resolutions dated February 7, 2006 4 and May 23, 2008 5 of the Department of Justice (DOJ) which, in turn, upheld the Resolution 6 dated March 12, 2004 and Order 7 dated October 18, 2004 issued by Makati City 4th Assistant City Prosecutor Amador Y. Pineda (ACP Pineda) in I.S. No. 03-K-23362-63.

The Antecedents

Petitioner E. Ganzon, Inc. (EGI) is a corporation duly organized and existing under the laws of the Philippines. It is engaged in the business of construction and real estate development. 8

On the other hand, respondents Jeronimo U. Kilayko (Kilayko), Lorenzo V. Tan (Tan), Virgilio S. Jacinto (Virgilio), Enrique L. Gana (Gana), Jaime W. Jacinto (Jaime), and Emily R. Lazaro (Lazaro) (respondents) are corporate officers of United Coconut Planters Bank (UCPB), a universal bank duly organized and existing under Philippine laws.

EGI had been availing of UCPB's credit facilities to finance the costs of its business expansion. Between 1995 and 1998, EGI entered into the following agreements with UCPB to secure loans in the total amount of P1,125,000,000.00:

 

Nature	Date of Loan Agreement	Amount	Promissory Note No.
Term Loan 1	July 12, 1995 9	P200,000,000.00	5735-95-01893-8 5735-95-02224-2 5735-95-02396-6 5735-95-02630-2 8129-95-00037-0 8129-95-00040-0 8129-95-00042-7 8129-95-00047-8 8129-95-00052-4 8129-95-00059-1 8129-95-00058-3 8129-95-00065-6 8129-95-00066-4 8129-96-0000-3 10
Term Loan 2	April 15, 1996 11	P125,000,000.00	5735-96-02502-4 8129-96-00019-6 8129-96-00032-3 8129-96-00035-8 8129-96-00037-4 8129-96-00038-2 8129-96-00042-0 8129-96-00046-3 8129-96-00048-0 8129-96-00053-6 8129-96-00054-4 8129-96-00057-9 8129-96-00060-9 8129-96-00061-7 8129-96-00067-6 8129-96-00070-6 8129-96-00078-1 8129-96-00079-0 8129-96-00085-4 8129-96-00086-2 8129-96-00089-7 8129-96-00090-0 12
Term Loan 3	August 29, 1997 13	P300,000,000.00	5735-97-03948-7 5735-98-00056-8 5735-98-00174-2 5735-98-00320-6 5735-98-000565-9 14
Additional	August 13, 1998 15	P350,000,000.00	8129-98-00029-0 8129-98-00030-4 8129-98-00031-2 8129-98-00032-0 8129-98-00034-7 8129-98-00036-3 8129-98-00037-1 8129-98-00038-0 8129-98-00040-1 8129-98-00042-8 8129-98-00043-6 8129-98-00044-4 8129-98-00045-2 8129-98-00046-0 8129-98-00048-7 8129-99-00001-4 8129-99-00008-1 8129-99-00009-0 16
Short Term Loan	December 29, 1998 17	P150,000,000.00	8129-99-00004-9 18

 

However, EGI failed to pay its monthly loan amortizations, prompting UCPB to declare it in default. 19 Thereafter, EGI and UCPB entered into a series of negotiations on how to settle the former's outstanding balance amounting to P919,805,640.74. 20

The parties agreed to use the mortgaged condominium units of EGI located at Rufino Plaza, Makati City as payment therefor. Pursuant thereto, EGI and UCPB entered into a Memorandum of Agreement 21 (MOA) dated December 28, 1999. On January 18, 2000, the parties signed an Amendment of Agreement 22 setting the fair market value of EGI's real properties at P904,491,052.00. The said properties would be used to pay EGI's outstanding loan to UCPB. The foregoing MOA provides, inter alia, that:

Section 3.1. Authority of the BANK. — EGI acknowledges, declares and confirms that the BANK shall have the discretion in determining the mode of conveyance and transfer of the title to the Property in the name of the BANK (or the designated transferees as the case may be) as provided under applicable laws, statutes, rules and regulations. EGI further declares and confirms that the BANK may:

a. enforce the rights and remedies of the BANK provided under the existing security arrangements executed between EGI and the BANK covering the Property;

b. require EGI to assign the Property, by way of dacion en pago in favor of the BANK;

c. with the cooperation of EGI, cause the organization and establishment of corporate entities for the purpose of acquiring the outstanding shares of capital stock of such corporations which shall, in turn, hold title to the Property; and

d. implement such other alternatives as the BANK may reasonably deem appropriate for the purpose of acquiring ownership of and title to the Property. 23

On April 13, 2000, UCPB foreclosed some of EGI's properties. As evidenced by the Certificate of Sale 24 dated April 14, 2000, UCPB as the highest bidder acquired the said properties for the total amount of P723,592,000.00, which was much lower than UCPB's valuation. Through a letter 25 dated October 20, 2000, UCPB formally informed EGI of the said foreclosure sale, applying the proceeds thereof to EGI's outstanding balance.

Thereafter, on May 8, 2000, EGI and UCPB executed several Dacion en Pago26 contracts covering 107 condominium units as payment for EGI's remaining debts. The total value of the units covered by the dacion en pago, according to EGI, is P166,127,368.50. 27

The dispute on the amount of

It is EGI's belief that following the extrajudicial foreclosure sale and prior to the execution of the dacion en pago contracts, its outstanding loan obligation to UCPB was reduced to P192,246,822.50. UCPB on the other hand, insists that the said amount stood at P226,963,906.00, 28 taking into consideration the transaction costs (filing fees, registration fees, commission on sales, publication, notary public fees, miscellaneous fees, and attorney's fees) amounting to P34,511,283. 29

It appears that on May 9, 2001, EGI's Senior Vice President and authorized representative, Grace S. Layug, went to UCPB's office to receive some documents from the bank. One of the documents that was purportedly handed to her is an internal memorandum 30 dated February 22, 2001, addressed to respondents Kilayko, Tan, and Virgilio and signed by respondents Jaime and Lazaro in their capacity as UCPB's corporate officers, breaking down the computation of the "actual amount" vis-à-vis the "disclosed amount" of EGI's outstanding loan obligations. In the column for "ACTUAL," the total obligation was computed at P150,380,397.17. In contrast, under the "DISCLOSED TO EGI" column, the aggregate amount was P267,678,288.97. 31

These conflicting figures, EGI avers, prove that UCPB's corporate officers committed fraud and irregularities in arbitrarily padding and inflating its outstanding obligation from the "actual" value thereof. Thus, on May 21, 2001, EGI's President and Chairperson, Eulalio Ganzon, wrote UCPB a letter 32 which pertinently reads as follows:

It was just shocking for us to find out very recently that our obligation as indicated in the bank's documents after the foreclosure was only Php83 Million and that the bank has actually padded our obligation and has maliciously disclosed to us a much larger liability of over Php192 Million.

xxx xxx xxx

At this point we are taking this matter without intervention of the court by demanding the following:

1. Refund of over payment of Php83 Million

2. Return of all the remaining TCT/CCTs in UCPB's possession

3. Settling the issues of value of movables in the hotel not covered by foreclosure

4. Settling the issue of the remaining 28 CCTs in the hotel zone and parking zone

5. Cost damage to EGI for delay in releasing the titles/collaterals 33

UCPB did not accede to EGI's demand. This prompted EGI to file an administrative complaint before the Bangko Sentral ng Pilipinas (BSP) Monetary Board, for violation of Sections 55 and 56 of Republic Act (R.A.) No. 8791, otherwise known as The General Banking Law of 2000, in relation to Article IV, Section 36 of R.A. No. 7653 or the New Central Bank Act.

The administrative complaint filed

On September 17, 2003, the BSP Monetary Board issued a letter dismissing the said complaint, explaining as follows:

Please be informed that the Monetary Board decided to dismiss the complaint based on the evaluation conducted by the Supervision and Examination Department I and the Office of the General Counsel and Legal Services to the effect that:

1. UCPB computed interest on the loans based on BSP rules and regulations which prohibit banks from accruing interest on loans that have become non-performing (BSP Circular No. 202). This is different from interest which may have run and accrued based on the promissory notes/loan documents from the date of default up to settlement date.

2. Fair market value of assets to be foreclosed is different from the bid price submitted during foreclosure and there is no statutory obligation for the latter to be equivalent to the former.

3. Regarding the alleged P145,163,000.00 fabricated loan, the documents showed that there were the EGI Board Resolution to borrow, promissory note signed by Mr. Eulalio Ganzon, and Loan Agreement stating that the proceeds shall be used to pay outstanding availments and interest servicing.

4. There is no finding by the Supervision and Examination Department I on the alleged double charging and/or padding of transaction costs. 34

Aggrieved, EGI filed a Rule 43 Petition for Review with the CA which, in turn, granted the same. In its Decision 35 dated October 14, 2004, the CA ordered the remand of the case to the BSP Monetary Board for further proceedings. Furthermore, in its Resolution 36 dated July 7, 2005, the appellate court reasoned that remand was proper "to dig deeper into the acts of UCPB to see if x x x indeed there were irregularities and unsound banking practices in its business dealings with EGI." 37

Both parties then interposed separate petitions before this Court, docketed as G.R. Nos. 168859 and 168897. The Court, in a Decision 38 dated June 30, 2009, affirmed the ruling of the CA. Thus:

WHEREFORE, premises considered, the Petition for Review on Certiorari of United Coconut Planters Bank, Jeronimo U. Kilayko, Lorenzo V. Tan, Enrique L. Gana, Jaime W. Jacinto and Emily R. Lazaro, in G.R. No. 168859; as well as the Petition for Review on Certiorari of E. Ganzon, Inc. in G.R. No. 168897, are hereby DENIED. The Decision dated 14 October 2004 and Resolution dated 7 July 2005 of the Court of Appeals in CA-G.R. SP No. 81385 are hereby AFFIRMED in toto. No costs.

SO ORDERED. 39

Resultantly, the BSP Monetary Board instructed its Supervision and Examination Sector to hold further administrative proceedings relative to EGI's complaint, docketed as OSI-AC No. 2010-036. The opposing parties were likewise required to submit their respective position papers.

EGI accused UCPB of committing the following acts:

1. UCPB created a fictitious EGI loan account in the amount of P145,163,000.00; 40

2. UCPB padded the total loan obligation of EGI as shown by the presence of two sets of computation in the UCPB internal memorandum: the "Actual Amount" and the "Disclosed Amount" to EGI; 41

3. Utter disregard by UCPB of the values of EGI's properties as stipulated in the MOA and its amendment; 42 and

4. Double collection of the amount of P34,717,083.00 as transaction costs. 43

On September 20, 2011, the BSP Monetary Board's Office of Special Investigation rendered a Resolution 44 dismissing the administrative charges against respondents. It ruled that (a) the allegation that UPCB created a fictitious EGI loan account is easily disproved by the Loan Agreement 45 dated December 29, 1998 and Promissory Note No. 8129-99-00004-9 46 which were signed by EGI's duly authorized corporate officers; 47 (b) apart from the unsigned tables of computation which were attached to UCPB's internal memorandum, EGI did not present a single iota of evidence to show that its outstanding loan obligations to UCPB was indeed lower than the amount being demanded from the corporation; 48 (c) in a public auction sale of foreclosed real property, there is nothing irregular in having a bid price which is lower than the fair market value thereof; 49 and (d) a more thorough review of the terms of the contracts between UCPB and EGI is necessary to determine the party that must shoulder the transaction costs. 50

Meanwhile, EGI likewise filed a Complaint-Affidavit 51 before the Office of the City Prosecutor (OCP) of Makati City, imputing against respondents violations of Article IV, Section 36 of R.A. No. 7653, and Sections 55.1 (a) and 56 of R.A. No. 8791. It bears noting that this is a reiteration of EGI's allegations in its administrative complaint before the BSP Monetary Board.

The OCP-Makati City's Ruling

On March 12, 2004, ACP Pineda of the OCP-Makati City rendered a Resolution 52 dismissing EGI's Complaint-Affidavit.

Referencing the BSP Monetary Board's September 17, 2003 letter 53 dismissing EGI's administrative complaint, ACP Pineda ratiocinated that matters such as bank practices and methods are best dealt with by the BSP itself. 54 The dismissal of the administrative case against respondents means that there is no more basis or justifiable reason to maintain the criminal suit, ACP Pineda explained. 55 Moreover, the evidence presented by EGI was insufficient to support a finding of probable cause against respondents. 56

EGI's Motion for Reconsideration 57 was denied by ACP Pineda in his Order 58 dated October 18, 2004.

Undaunted, EGI filed a Petition for Review 59 with the Office of the DOJ Secretary.

The DOJ's Ruling

On February 7, 2006, the DOJ issued a Resolution 60 dismissing EGI's Petition for Review outright. Thus:

Under Section 12, in relation to Section 7 of Department Circular No. 70 dated July 3, 2000, that the Secretary of Justice may, motu proprio, dismiss outright the petition if there is no showing of any reversible error.

We carefully examined the petition, including the issues and arguments raised vis-à-vis the questioned resolution and, on the basis of the evidence on record, found no error that would justify a reversal of the appealed resolution.

WHEREFORE, the petition is hereby DENIED.

SO ORDERED. 61

EGI interposed a Motion for Reconsideration 62 which was denied by the DOJ in its May 23, 2008 Resolution. 63

Resolute in its conviction that respondents must be indicted for the offenses charged, EGI filed a Rule 65 Petition for Certiorari64 with the CA.

The CA's Ruling

The CA, in the herein assailed Decision 65 dated September 25, 2012, found that the DOJ Secretary did not commit grave abuse of discretion, amounting to lack or excess of jurisdiction, in affirming ACP Pineda's findings and conclusions. The appellate court reasoned that in dismissing the Petition for Review outright, the DOJ Secretary was merely disposing of the case in accord with his agency's own procedural rules. Moreover, EGI was not able to proffer any new arguments as would warrant a departure from the findings and conclusions of the DOJ. 66 The CA disposed:

ACCORDINGLY, the petition is DISMISSED for utter lack of merit.

SO ORDERED. 67

EGI's Motion for Reconsideration 68 was denied by the CA in the herein assailed Resolution 69 dated December 13, 2012.

Hence, the present recourse.

Issues

EGI argues in the affirmative of the following issues:

I.

WHETHER OR NOT THE PUBLIC RESPONDENT ACTED WITHOUT OR IN EXCESS OF JURISDICTION AND/OR WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUING THE RESOLUTIONS DATED 07 FEBRUARY 2006 AND 23 MAY 2008.

II.

WHETHER OR NOT THERE WAS GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN THE PUBLIC RESPONDENT HELD THAT THERE WAS NO PROBABLE CAUSE TO INDICT PRIVATE RESPONDENTS FOR VIOLATION OF SECTION 36, ARTICLE IV OF REPUBLIC ACT NO. 7653 (BANGKO SENTRAL ACT) IN RELATION TO SECTIONS 55.1(a) AND 56 OF REPUBLIC ACT NO. 8791 (THE GENERAL BANKING ACT). 70

The Ruling of the Court

The petition is devoid of merit.

Questions of fact cannot be raised

At the outset, it must be emphasized that only questions of law may be raised in a petition for review on certiorari71 as the Court is not a trier of facts. 72 This Court will not review facts, as it is not Our function to analyze or weigh all over again evidence already considered in the proceedings below. 73

In Miro v. Vda. de Erederos, 74 the Court laid down the parameters of a judicial review of a Rule 45 petition, to wit:

a. Rule 45 petition is limited to questions of law

Before proceeding to the merits of the case, this Court deems it necessary to emphasize that a petition for review under Rule 45 is limited only to questions of law. Factual questions are not the proper subject of an appeal by certiorari. This Court will not review facts, as it is not our function to analyze or weigh all over again evidence already considered in the proceedings below. As held in Diokno v. Hon. Cacdac, a re-examination of factual findings is outside the province of a petition for review on certiorari, to wit: aScITE

It is aphoristic that a re-examination of factual findings cannot be done through a petition for review on certiorari under Rule 45 of the Rules of Court because as earlier stated, this Court is not a trier of facts[.] x x x The Supreme Court is not duty-bound to analyze and weigh again the evidence considered in the proceedings below. This is already outside the province of the instant Petition for Certiorari.

There is a question of law when the doubt or difference arises as to what the law is on a certain set of facts; a question of fact, on the other hand, exists when the doubt or difference arises as to the truth or falsehood of the alleged facts. Unless the case falls under any of the recognized exceptions, we are limited solely to the review of legal questions.

b. Rule 45 petition is limited to errors of the appellate court

Furthermore, the "errors" which we may review in a petition for review on certiorari are those of the CA, and not directly those of the trial court or the quasi-judicial agency, tribunal, or officer which rendered the decision in the first instance. (Citations omitted)

Indeed, for a question to be one of law, the question must not involve an examination of the probative value of the evidence presented by any of the litigants. The resolution of the issue must solely depend on what the law provides on the given set of circumstances. Once it is obvious that the issue invites a review of the evidence presented, the question posed is one of fact. 75 The test of whether a question is one of law or of fact is not the appellation given to such question by the party raising the same; rather, it is whether the appellate court can determine the issue raised without reviewing or evaluating the evidence, in which case, it is a question of law; otherwise it is a question of fact. 76

In Cheesman v. Intermediate Appellate Court, 77 We distinguished questions of fact and questions of law in the following manner:

As distinguished from a question of law — which exists "when the doubt or difference arises as to what the law is on a certain state of facts" — "there is a question of fact when the doubt or difference arises as to the truth or the falsehood of alleged facts"; or when the "query necessarily invites calibration of the whole evidence considering mainly the credibility of witnesses, existence and relevancy of specific surrounding circumstances, their relation; to each other and to the whole and the probabilities of the situation." (Citations omitted)

In the case at bar, all of the matters raised by EGI pertain to questions of fact. On this score alone, the instant petition merits an outright dismissal. Nevertheless, the Court has examined the supposed errors alleged by EGI. Even if We were to overlook EGI's grave procedural lapses, Our position remains unswayed. The CA did not commit any reversible error in rendering the herein assailed issuances.

Courts cannot interfere with the

Probable cause, for purposes of filing a criminal information 78 or dismissing the criminal complaint, 79 has been defined as such facts as are sufficient to engender a well-founded belief that a crime has been committed and that respondents are probably guilty thereof. 80 It is a reasonable ground of presumption that a matter is, or may be, well-founded on such a state of facts in the mind of the prosecutor as would lead a person of ordinary caution and prudence to believe, or entertain an honest or strong suspicion, that a thing is so. 81 Probable cause implies probability of guilt and requires more than bare suspicion but less than evidence which would justify a conviction. 82 Being based merely on opinion and reasonable belief, it does not import absolute certainty. 83 What is merely required is "probability of guilt." 84

Since the prosecution of crimes lies with the executive department of the government whose principal power and responsibility is to see that the laws of the land are faithfully executed, 85 the determination of the existence of probable cause lies within the discretion of the prosecuting officers after they have conducted a preliminary investigation upon complaint of an offended party. 86 To determine the existence of probable cause, there is a need to conduct preliminary investigation. A preliminary investigation constitutes a realistic judicial appraisal of the merits of a case. 87 At a preliminary investigation, the investigating prosecutor or the Secretary. of Justice only determines whether the act or omission complained of constitutes the offense charged. 88

In Crespo v. Mogul, 89 the Court declared:

It is a cardinal principle that all criminal actions either commenced by complaint or by information shall be prosecuted under the direction and control of the fiscal. The institution of a criminal action depends upon the sound discretion of the fiscal. He may or may not file the complaint or information, follow or not follow that presented by the offended party, according to whether the evidence in his opinion, is sufficient or not to establish the guilt of the accused beyond reasonable doubt. The reason for placing the criminal prosecution under the direction and control of the fiscal is to prevent malicious or unfounded prosecution by private persons. It cannot be controlled by the complainant. Prosecuting officers under the power vested in them by law, not only have the authority but also the duty of prosecuting persons who, according to the evidence received from the complainant, are shown to be guilty of a crime committed within the jurisdiction of their office. They have equally the legal duty not to prosecute when after an investigation they become convinced that the evidence adduced is not sufficient to establish a primafacie case.

In Elma v. Jacobi, 90 the Court further ratiocinated:

The necessary component of the Executive's power to faithfully execute the laws of the land is the State's self-preserving power to prosecute violators of its penal laws. This responsibility is primarily lodged with the DOJ, as the principal law agency of the government. The prosecutor has the discretionary authority to determine whether facts and circumstances exist meriting reasonable belief that a person has committed a crime. The question of whether or not to dismiss a criminal complaint is necessarily dependent on the sound discretion of the investigating prosecutor and, ultimately, of the Secretary (or Undersecretary acting for the Secretary) of Justice. Who to charge with what crime or none at all is basically the prosecutor's call.

Accordingly, the Court has consistently adopted the policy of non-interference in the conduct of preliminary investigations, and to leave the investigating prosecutor sufficient latitude of discretion in the determination of what constitutes sufficient evidence to establish probable cause. Courts cannot order the prosecution of one against whom the prosecutor has not found a prima facie case; as a rule, courts, too, cannot substitute their own judgment for that of the Executive.

In fact, the prosecutor may err or may even abuse the discretion lodged in him by law. This error or abuse alone, however, does not render his act amenable to correction and annulment by the extraordinary remedy of certiorari. To justify judicial intrusion into what is fundamentally the domain of the Executive, the petitioner must clearly show that the prosecutor gravely abused his discretion amounting to lack or excess of jurisdiction in making his determination and in arriving at the conclusion he reached. This requires the petitioner to establish that the prosecutor exercised his power in an arbitrary and despotic manner by reason of passion or personal hostility; and it must be so patent and gross as to amount to an evasion or to a unilateral refusal to perform the duty enjoined or to act in contemplation of law, before judicial relief from a discretionary prosecutorial action may be obtained. x x x (Citations omitted)

And in Aguilar v. Department of Justice, 91 the Court laid down the guiding principles in determining whether the public prosecutor committed grave abuse of discretion in the exercise of his/her function. 92 Thus:

A public prosecutor's determination of probable cause — that is, one made for the purpose of filing an information in court — is essentially an executive function and, therefore, generally lies beyond the pale of judicial scrutiny. The exception to this rule is when such determination is tainted with grave abuse of discretion and perforce becomes correctible through the extraordinary writ of certiorari. It is fundamental that the concept of grave abuse of discretion transcends mere judgmental error as it properly pertains to a jurisdictional aberration. While defying precise definition, grave abuse of discretion generally refers to a "capricious or whimsical exercise of judgment as is equivalent to lack of jurisdiction." Corollary, the abuse of discretion must be patent and gross so as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law. To note, the underlying principle behind the courts' power to review a public prosecutor's determination of probable cause is to ensure that the latter acts within the permissible bounds of his authority or does not gravely abuse the same. This manner of judicial review is a constitutionally-enshrined form of check and balance which underpins the very core of our system of government. As aptly edified in the recent case of Alberto v. CA:

It is well-settled that courts of law are precluded from disturbing the findings of public prosecutors and the DOJ on the existence or non-existence of probable cause for the purpose of filing criminal informations, unless such findings are tainted with grave abuse of discretion, amounting to lack or excess of jurisdiction. The rationale behind the general rule rests on the principle of separation of powers, dictating that the determination of probable cause for the purpose of indicting a suspect is properly an executive function; while the exception hinges on the limiting principle of checks and balances, whereby the judiciary, through a special civil action of certiorari, has been tasked by the present Constitution "to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government." x x x

In the foregoing context, the Court observes that grave abuse of discretion taints a public prosecutor's resolution if he arbitrarily disregards the jurisprudential parameters of probable cause. In particular, case law states that probable cause, for the purpose of filing a criminal information, exists when the facts are sufficient to engender a well-founded belief that a crime has been committed and that the respondent is probably guilty thereof. It does not mean "actual and positive cause" nor does it import absolute certainty. Rather, it is merely based on opinion and reasonable belief and, as such, does not require an inquiry into whether there is sufficient evidence to procure a conviction; it is enough that it is believed that the act or omission complained of constitutes the offense charged. As pronounced in Reyes v. Pearlbank Securities, Inc.:

A finding of probable cause needs only to rest on evidence showing that more likely than not a crime has been committed by the suspects. It need not be based on clear and convincing evidence of guilt, not on evidence establishing guilt beyond reasonable doubt, and definitely not on evidence establishing absolute certainty of guilt. In determining probable cause, the average man weighs facts and circumstances without resorting to the calibrations of the rules of evidence of which he has no technical knowledge. He relies on common sense. What is determined is whether there is sufficient ground to engender a well-founded belief that a crime has been committed, and that the accused is probably guilty thereof and should be held for trial. It does not require an inquiry as to whether there is sufficient evidence to secure a conviction. x x x

Apropos thereto, for the public prosecutor to determine if there exists a well-founded belief that a crime has been committed, and that the suspect is probably guilty of the same, the elements of the crime charged should, in all reasonable likelihood, be present. This is based on the principle that every crime is defined by its elements, without which there should be, at the most, no criminal offense. 93

Consequently, it is a sound judicial policy for the courts to refrain from interfering in the conduct of the preliminary investigation, and to just leave to the DOJ the ample latitude of discretion in the determination of what constitutes sufficient evidence to establish probable cause for the prosecution of offenders. 94 By the nature of his or her office, a public prosecutor is under no compulsion to file a particular criminal information where he or she is not convinced that he or she has evidence to prop up the averments thereof, or that the evidence at hand points to a different conclusion. 95 Absent any showing of arbitrariness on the part of the prosecutor or any other officer authorized to conduct preliminary investigation, courts as a rule must defer to said officer's finding and determination of probable cause, since the determination of the existence of probable cause is the function of the prosecutor. 96 After all, a preliminary investigation is also intended to protect the State from having to conduct useless and expensive trials. 97 DETACa

Nevertheless, the actions of the Secretary of Justice in affirming or reversing the findings of prosecutors may still be subject to judicial review if it is tainted with grave abuse of discretion. 98 In other words, judicial review of the resolution of the Secretary of Justice is limited to a determination of whether there has been a grave abuse of discretion amounting to lack or excess of jurisdiction considering that full discretionary authority has been delegated to the executive branch in the determination of probable cause during a preliminary investigation. 99

By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. The abuse of discretion is grave where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility and must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act at all in contemplation of the law. 100

In the case at bar, the Court finds no grave abuse of discretion on the part of the CA when it affirmed the issuances of the DOJ.

The allegations in EGI's

In challenging the OCP-Makati City's dismissal of its complaint, EGI asserts that the public prosecutor "blindly" 101 relied on the BSP Monetary Board's September 17, 2003 letter which had already been set aside by this Court. EGI's myopic view is untenable.

It bears noting that in his March 12, 2004 Resolution, ACP Pineda provided a detailed summary of the parties' respective arguments and documentary evidence as amplified in their respective affidavits. Thus, it is highly inaccurate and misleading for EGI to claim that the OCP-Makati City did not conduct its own evaluation of the allegations in its complaint. To the mind of the Court, ACP Pineda was able to discharge his duty in this case.

In any event, a punctilious perusal of EGI's Complaint-Affidavit readily shows that despite its verbosity, it had failed to allege a single specific allegation against respondents. EGI's general and sweeping allegations could hardly be considered as evidence of respondents' supposed wrongdoing.

Moreover, a closer scrutiny of the allegations reveals that respondents Jaime and Lazaro are being sued primarily because they signed the internal memorandum dated February 22, 2001. On the other hand, respondents Kilayko, Tan, and Virgilio have been implicated simply because the said document was addressed to them. These are hardly sufficient reasons that would warrant their indictment for the offenses charged.

At any rate, the outright dismissal

EGI excoriates the Secretary of Justice's supposed failure to discuss the "substantial arguments raised x x x and why no error that would justify a reversal of the appealed decision was found," 102 bemoaning the said Resolution being contained only in one page.

We cannot sustain EGI's contention.

The Secretary of Justice exercises control and supervision over all the regional, provincial, and city prosecutors of the country; has broad discretion in the discharge of the DOJ's functions; and administers the DOJ and its adjunct offices and agencies by promulgating rules and regulations to carry out their objectives, policies and functions. 103 His or her review of the resolutions of prosecutors is not a ministerial function. 104

In Odchigue-Bondoc v. Tan Tiong Bio, 105 this Court ruled that the outright dismissal of petitions for review by the Secretary of Justice follows a two-step approach that are within his or her review power, viz.:

Respecting the action of the Secretary of Justice on respondent's petition for review under Section 12 of the NPS Rule on Appeal, respondent posits that "outright" dismissal is not sanctioned thereunder but under Section 7. Respondent's position similarly fails.

That the DOJ Secretary used the word "outright" in dismissing respondent's petition for review under Section 12 of the Rule which reads:

SEC. 12. Disposition of the appeal. — The Secretary may reverse, affirm or modify the appealed resolution. He may, motu proprio or upon motion, dismiss the petition for review on any of the following grounds:

xxx xxx xxx

(a) That there is no showing of any reversible error; x x x

does not dent his action. To be sure, the word "outright" was merely used in conjunction with the motu proprio action.

Section 7 has an altogether different set of grounds for the outright dismissal of a petition for review. These are (a) when the petition is patently without merit; (b) when the petition is manifestly intended for delay; (c) when the issues raised therein are too unsubstantial to require consideration; and (d) when the accused has already been arraigned in court.

When the Secretary of Justice is convinced that a petition for review does not suffer any of the infirmities laid down in Section 7, it can decide what action to take (i.e., reverse, modify, affirm or dismiss the appeal altogether), conformably with Section 12. In other words, Sections 7 and 12 are part of a two-step approach in the DOJ Secretary's review power.

This Court is of the considered view that the Secretary of Justice's exercise of his or her agency's prescribed procedures in the instant case is not tantamount to grave abuse of discretion. As the CA correctly ratiocinated:

Here, the Secretary of Justice complied with the two-step process. After he had determined that the petition for review did not suffer any infirmities, he correctly cited the ground of "no showing of reversible error" in denying the petition. Thus, he stated "under Section 12, in relation to Section 7, of Department Circular No. 70 dated July 3, 2000, that the Secretary of Justice may, motu proprio, dismiss outright the petition if there is no showing of any reversible error." Verily, for disposing of the case in accord with the DOJ's own rules of procedure, the Secretary of Justice cannot be faulted with grave abuse of discretion. 106

In fine, courts are not empowered to substitute their judgment for that of the Secretary of Justice, save only when it was rendered with grave abuse of discretion amounting to lack or excess of jurisdiction, 107 which is not extant in this case.

WHEREFORE, the petition is DENIED for lack of merit. Accordingly, the Decision dated September 25, 2012 and Resolution dated December 13, 2012 issued by the Court of Appeals in CA-G.R. SP No. 104635 are hereby AFFIRMED.

SO ORDERED." Carandang, J., no part; Leonen, J., designated Additional Member per Raffle dated July 5, 2021.

By authority of the Court:

(SGD.) LIBRADA C. BUENADivision Clerk of Court

by:

MARIA TERESA B. SIBULODeputy Division Clerk of Court

 

Footnotes

1.Rollo, pp. 35-78.

2.Id. at 79-102; penned by Associate Justice Amy C. Lazaro-Javier (now a Member of this Court) and concurred in by Associate Justices Mariflor P. Punzalan Castillo and Edwin D. Sorongon.

3.Id. at 103.

4.Id. at 426-427; signed by Secretary Raul M. Gonzalez.

5.Id. at 443-444.

6.Id. at 283-294. The Resolution was recommended for approval by 2nd Assistant City Prosecutor Christopher C. Garvida and approved by City Prosecutor Feliciano Aspi.

7.Id. at 321-322.

8.Id. at 140-141.

9.Id. at 824-828.

10.Id. at 829-842.

11.Id. at 843-849.

12.Id. at 850-871.

13.Id. at 872-885.

14.Id. at 886-890.

15.Id. at 891-892.

16.Id. at 893-910.

17.Id. at 934-939.

18.Id. at 943.

19.Id. at 955-959.

20.Id. at 955.

21.Id. at 104-111.

22.Id. at 112-122.

23.Id. at 106.

24.Id. at 124-125.

25.Id. at 123.

26.Id. at 1142-1479.

27.Id. at 42.

28.Id. at 1130.

29.Id. at 1131.

30.Id. at 126-130.

31.Id. at 130.

32.Id. at 1480-1481.

33.Id. at 1481.

34.Id. at 1488-1489.

35.Id. at 323-339; penned by Associate Justice Lucenito N. Tagle and concurred in by Associate Justices Eloy R. Bello, Jr. and Regalado E. Maambong.

36.Id. at 1533-1536; penned by Associate Justice Lucenito N. Tagle and concurred in by Associate Justices Rosmari D. Carandang and Estela Perlas M. Bernabe (now Members of this Court).

37.Id. at 1535.

38.Id. at 1538-1564; penned by Associate Justice Minita V. Chico-Nazario and concurred in by Associate Justices Consuelo Ynares-Santiago, Presbitero J. Velasco, Jr., Antonio Eduardo B. Nachura, and Diosdado M. Peralta. (United Coconut Planters Bank v. E. Ganzon, Inc., 606 Phil. 104 [2009].)

39.United Coconut Planters Bank v. E. Ganzon, Inc., id. at 133.

40.Rollo, p. 1653.

41.Id. at 1654.

42.Id. at 1662.

43.Id. at 1666.

44.Id. at 1642-1685.

45.Id. at 934-939.

46.Id. at 943.

47.Id. at 1673-1674.

48.Id. at 1677.

49.Id. at 1681-1682.

50.Id. at 1683-1684.

51.Id. at 140-170.

52.Id. at 283-294.

53.Id. at 1488-1489.

54.Id. at 292.

55.Id. at 293.

56.Id. at 291.

57.Id. at 295-305.

58.Id. at 321-322.

59.Id. at 340-384.

60.Id. at 426-427.

61.Id. at 426.

62.Id. at 428-442.

63.Id. at 443-444.

64.Id. at 445-497.

65.Id. at 79-102.

66.Id. at 100-101.

67.Id. at 101.

68.Id. at 733-747.

69.Id. at 103.

70.Id. at 53-54.

71.Pascual v. Burgos, 776 Phil. 167, 182 (2016).

72.Gatan v. Vinarao, 820 Phil. 257, 265 (2017).

73.Equitable PCI Bank v. Manila Adjusters and Surveyors, Inc., G.R. No. 166726, November 25, 2019.

74. 721 Phil. 772, 785-786 (2013).

75.Heirs of Teresita Villanueva v. Heirs of Petronila Syquia Mendoza, 810 Phil. 172, 178 (2017).

76.Century Iron Works, Inc. v. Banas, 711 Phil. 576, 586 (2013).

77. 271 Phil. 89, 97-98 (1991).

78.Callo-Claridad v. Esteban, 707 Phil. 172, 183 (2013).

79.Napoles v. De Lima, 790 Phil. 161, 175 (2016).

80.People v. Borje, Jr., 749 Phil. 719, 728 (2014).

81.Sales v. Adapon, 796 Phil. 368, 379 (2016).

82.Villarosa v. Ombudsman, G.R. No. 221418, January 23, 2019.

83.Chan v. Secretary of Justice, 572 Phil. 118, 132 (2008).

84.Unilever Philippines, Inc. v. Tan, 725 Phil. 486, 497-498 (2014).

85.Punzalan v. Plata, 717 Phil. 21, 32 (2013).

86.Cam v. Casimiro, 762 Phil. 72, 83-84 (2015).

87.Metropolitan Bank & Trust Company v. Gonzales, 602 Phil. 1000, 1009 (2009).

88.Metropolitan Bank & Trust Co. v. Tobias III, 680 Phil. 173, 187 (2012).

89. 235 Phil. 465, 472 (1987).

90. 689 Phil. 307, 340-342 (2012).

91. 717 Phil. 789 (2013).

92.Hilbero v. Morales, Jr., 803 Phil. 220, 250-252 (2017).

93.Aguilar v. Department of Justice, supra note 91 at 798-800.

94.Sales v. Adapon, supra note 81 at 381.

95.Balangauan v. Court of Appeals, 584 Phil. 183, 202 (2008).

96.Chan v. Secretary of Justice, supra note 83 at 130.

97.Duterte v. Sandiganbayan, 352 Phil. 557, 576 (1998).

98.De Lima v. Reyes, 776 Phil. 623, 636 (2016).

99.United Coconut Planters Bank v. Looyuko, 560 Phil. 581, 591 (2007).

100.Forietrans Manufacturing Corp. v. Davidoff Et. Cie SA & Japan Tobacco, Inc., 806 Phil. 704, 717 (2017).

101.Rollo, p. 59.

102.Id. at 56.

103.Spouses Dacudao v. Gonzales, 701 Phil. 96, 108 (2013).

104.De Lima v. Reyes, supra note 98 at 639.

105. 646 Phil. 743, 750-751 (2010).

106.Rollo, p. 28.

107.Madrigal v. Department of Justice, 736 Phil. 500, 514 (2014).